Microsoft beats on quarterly earnings, but sales disappoint

Microsoft beat analysts' quarterly earnings forecasts by a mile, as growth in its cloud computing and enterprise segments helped to offset slowing revenues from its flagship operating system Windows, although top-line growth was weaker than anticipated on Wall Street.

The information technology giant moved back into the black in its fiscal fourth quarter, clocking in with net income of $3.12bn or 39 cents a share, versus a loss of $3.2bn or 4 cents one year ago.

In adjusted terms, excluding the impact from revenue deferrals and restructuring items that is, earnings per share improved from 62 cents one year ago to 69 cents.

That compared favourably with the 58 cents predicted by analysts.

Sales on the other hand slipped by 7.1% to $20.61bn (consensus: $22.1bn) - their first drop since 2009 - as the Redmond, Washington-based firm continued to execute on its strategic plan to shift away from the market for personal computers.

By activity segments, revenues at its More Personal Computing segment, which includes Windows, dropped 3.7% to $8.9bn.

At its Productivity and Business Processes segment sales gained 4.6% to $6.97bn and by another 6.6% to $6.71bn at its Intelligent Cloud segment.

Shares of Microsoft advanced 4.24% to $55.34 after the close of trading.